HNA Update
The Town’s pick, Kitching/Pelayo’s (REVEIL LLC) vision of a hotel/resort on the property that connects Route 9W with Route 340 in Palisades has been in “negotiations” for more than a year with HNA. Even after having invested $600,000 in deposit fees, they have been unable to close the deal with HNA. In July, an affiliate of SL Green, a Manhattan-based REIT (Real Estate Investment Trust), won a $185M arbitration award against HNA International Group due to a separate issue with an HNA property at 245 Park Avenue in NYC. This court filing has basically tied up all sales of HNA properties. The sale of any HNA property must be disclosed to SL Green and all sale proceeds are to be transferred directly to pay off the $185M debt.
On the heels of that lawsuit, the previous “buyer,” Vasco Ventures/ZVG@Palisades, LLC (who filed bankruptcy the day before the closing in 2019 and lost $8M to HNA in the process) filed a lawsuit against HNA alleging that HNA sabotaged their 2019 deal, feeling they were entitled to the property by accusing HNA of a breach of contract. The lawsuit by ZVG@Palisades, LLC has been dismissed.
In October, the Orangetown Town Board voted on a resolution to begin eminent domain proceedings to take control of the property due to the inability of HNA to move forward with a sale. The property is decaying, (there are sinkholes, oil spills, and the water has been turned off) and HNA is $4 million in tax arrears. According to the New York State Attorney General’s Office, eminent domain is the process by which a government agency can acquire private property for public purpose. It is a long, complicated process by which—through extensive engineering and environmental impact studies—the Town will have to prove that condemnation of the property is necessary for public improvement. The Town must present its plan for improvement in a public hearing.
At this point, while Reveil, LLC and HNA continue to negotiate, the Town is moving forward with the eminent domain process by ordering an appraisal of the property. On February 21 the Town Board held a public hearing. There is still a chance that the two parties will reach a mutual agreement. If so, the Town will terminate the eminent domain procedure. This has been a long process and with every step taken forward, something on HNA’s end sets the process back two steps. Stay tuned…